One Company’s Sustainability Journey: Intel Procurement’s Experience in Establishing a Comprehensive Sustainability Program

Frank Sanders Director Corporate Strategic Procurement Intel Corporation October 30, 2012

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Today’s presentation contains forward-looking statements. All statements made that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Please refer to our most recent earnings release and our most recent Form 10-Q or 10-K filing, available at www.intc.com, for more information on the risk factors that could cause actual results to differ. Additionally, all products, computer systems, dates, and figures specified are preliminary based on current expectations, and are subject to change without notice.

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Agenda

Corporate Overview

Intel’s Environmental, Social, and Governance Program

Supply Chain Expectations

Summary

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What do they all have in common?

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Intel's Vision This Decade We Will Create and Extend Computing Technology

to Connect and Enrich the Lives of Every Person On Earth

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Intel Corporation: The World’s Largest Semiconductor Manufacturer

$43B 63 Countries

>100,000 Employees

~$16B Supply Chain

Customers, 120 Countries

10,000+ Suppliers

Top 10 Brand

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Intel Corporation: Corporate Responsibility Integrated into Our Business

“Continuing our commitment to the highest performance in all we do— from product innovation to corporate responsibility— is good business.”

Paul Otellini President and Chief Executive Officer Intel Corporation

>500 Awards,

Last Decade

>$1B Education, Last Decade

>1M hrs Volunteering

Per Year

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First EHS report and public goals

1968 1994 1996 1998 2000 2002 2004 2006 2008 2010

Board-level responsibility established

First full CSR report

Intel Corporate Responsibility Evolution It’s In Our DNA…

Culture and values established

CSR in “global strategy on a page” and link pay with CSR

CSR Mgmt Review Committee

CSR blog and integration into AR/10K

10th CSR report

Driving continuous improvement in performance and governance

Stakeholder engagement and “SRI road shows”

CSR business function

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Environmental Social Governance

What is ESG? Care for our people, the planet, and inspire the next generation

Standards/Transparency Investment Innovation

• Resource Conservation • Reuse and Recycling • Green Products (DfE)

• Supply Chain Responsibility • Education and Awareness • Workplace and Community

• Laws and Regulations • Product Compliance • Policy and Accountability

ESG – Ensuring businesses comply with local and country laws, limiting their impact on the environment,

and taking care of their employees and communities. 15

External ESG Evolution

Government NGO

• Environment Focus

• Environment • Social • Governance

Historical Recent History Current/Leading Co’s

•Opportunistic • “Green is Green” • Environment • Social • Governance

Leading companies have moved past compliance, making ESG a value

Driver

Direct Recipient

Indirect Recipient

Companies

Companies

Companies

Companies

Including Supply Chain

1970s 1990s 2010+

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Solar Conservation Energy Efficiency

Efficient Building Designs

ESG in Action Inside Intel Portfolio Approach to Emissions Reduction and Energy

Management

Green Power Purchases

Largest purchaser of Renewable Energy Credits, 4th year

9 solar installations

Generating >3.8M kWh per year of solar energy

Led world’s first voluntary commitment to reduce greenhouse gas emissions 10 percent. 45 percent achieved

$45M invested over decade in 1500 projects, saving ~790M kWh saved (~69,000 homes for 1 year)

Top 10 percent of companies reporting emissions via the CDP since 2003

New facilities Silver LEED or better

Israel Design Center, 1st Gold in Israel

First semiconductor company to certify an entire manufacturing campus to LEED

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Waste

ESG in Action Inside Intel Social

Water Workplace

~80 percent solid waste recycled

~70 percent chemical waste recycled

Composting cafeteria waste

Innovative local efforts

Reinvested savings, past 5 years into employee programs

$100M in vested in conservation programs since 1998

40B gallons saved (~370,000 U.S. homes per year)

~80 percent water used back to municipal treatment

Founding member of Water Innovation Alliance

OHSAS 18001 certification received

Forbes’ Top 100 Best Companies to Work For

9th year, Working Mother Top 100

Employee bonus linked to sustainability

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...And Our Supply Chain

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Our Approach to Supply Chain Sustainability

Setting Clear Expectations

Requirements

Measure and

Reinforce

Recognition System

Collaborating on Broad Initiatives

Conflict-Free

Engaging Our Employees

Purchasing Decisions

Supplier Management

Processes

Driving Higher Levels of

Transparency

Reporting

Engagement Activities

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Industry Associations

Supply Chain ESG Position Vision: ESG is a leadership value in our Supply Chain

SC ESG Procurement of goods (materials, products, equipment, services) and their impact on our society and the environment: Our products and operations Contributions from our suppliers and supply chain Incorporating ESG concerns

Supplier Expectations • Meet local laws, EICC, and Intel code of conduct

• Continuously reduce environmental footprint and social, governance risks associated with creation of components placed in our products

• Develop/deliver products that reduce environmental footprint and social, governance risks

• Transparency in ESG metrics and performance

“Looking ahead, we will continue to address challenges in reducing water use and chemical waste in our operations as we grow, and to drive leadership in supply chain responsibility.” —Paul Otellini, 2010 Corporate Responsibility Report

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Health and Safety • Occupational Safety • Emergency Preparedness • Occupational Injury and Illness • Industrial Hygiene • Physically Demanding Work • Machine Safeguarding • Dormitory and Canteen

Environmental • Permits and Reporting • Pollution Prevention • Hazardous Substances • Wastewater • Solid Waste • Air Emissions • Product Content

Collaborating on Broad Initiatives EICC Code of Conduct Elements

Labor • Freely Chosen Employment • Child Labor Avoidance • Working Hours • Wages and Benefits • Humane Treatment • Non-Discrimination • Freedom of Association

Ethics • Business Integrity • Anti-Corruption • Disclosure of Information • Intellectual Property • Fair Competition • Protection of Identity • Community Engagement

Management Systems

Approach

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Setting Clear Expectations Risk Assessment Overview

Risk Assessments (RA) are tools used in the industry to evaluate how a company implements the EICC Code of Conduct at each facility. • RA1: Internal Assessment; initial

indicator of potential risk focused on a few risk areas. (Corruption index, type of industry, etc.)

• RA2: Supplier Self Assessment or Self Assessment Questionnaire (SAQ); RA2 is an indicator of potential risk in their management and policies.

• RA3: On-site Audit; RA3 is an evaluation of performance to the EICC code of conduct at the site

Intel uses industry tools to measure conformance to the EICC Code of Conduct and expect our suppliers to implement sustainable solutions

http://www.eicc.info/tools_and_resources06.shtml

Collaborating on Broad Initiatives Conflict Minerals

Photo courtesy of Enough Project photostream

Intel is concerned that metals (gold, tantalum, tin, and tungsten) mined in the Democratic Republic of the Congo (DRC) for the electronics supply chain may be

fueling human rights atrocities in the eastern region of the DRC.

By end of 2012, Intel will demonstrate that our microprocessors are validated as conflict-free for tantalum, and by the end of 2013, Intel will manufacture the world’s

first microprocessor fully validated as conflict-free across all four minerals.

Source: 2011 Intel Corporate Responsibility Report, page 100.

Conflict-Free Minerals

Play Video

Supply Chain Highlights

• Reviewed results of 49 third-party audits in 2011, a five-fold increase over 2010

• Added ten new environmental screening considerations to our supplier award selection process

• Collected environmental data from our Top Tier 1 suppliers and shared results in our report

• Added ESG to supplier report cards based on risk assessments, their CSR programs

>10thousand Number of Intel suppliers, in over 100 countries

> 98 Number of smelter sites identified in our conflict minerals supply chain

> 391 Tons of paper and plastic that we saved through packaging and shipment redesigns in 2011

Copyright @2012 Intel Corporation. All rights reserved. Intel and the Intel Logo are trademarks of Intel Corporation in the U.S. and other countries.

Common Ideas to Begin Sustainability Initiatives

• Greening ground transportation

rental/lease fleets • Green rental car alternatives • Car leasing programs • Pilot to rent hybrid/electric

cars by the hour • Hotels

• Highlighted environmentally friendly hotels in travel tool

• Office Supplies • Eco-friendly stationery at same cost

and choice of alternatives with higher cost

• Print fulfilment • Moved collateral printing closer

to end users and made digital where possible

• Paperless option for benefits and card statements 27

Intensifying Our Focus

Carbon, Water, Waste

Audits

Supplier Report Card

Travel Options

Office Products

Packaging

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Evolving Procurement Value

ESG

Quality Technology

Availability

“Doing the right things right shouldn’t have to cost more.” - Brian Krzanich, Sr. VP and GM Manufacturing & Supply Chain

Cost

Total Cost

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Leadership and Collaboration are Required for Timely, Lasting Change.

“Doing the Right Things Right” Does Not Cost More.

Journey Starts with Integrated Business Value Culture and Strategies.

Summary

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“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it

is the only thing that ever has.”

— Margaret Mead

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Thank you for your time

Download a copy of this presentation: https://supplier.intel.com/supplierdiversity

Supplier Diversity e-mail address: supplierdiversity@intel.com